Germany's deputy finance minister has ruled out "eurobond-lite" plans to pool part of eurozone countries' debt. That may disappoint investors on international markets whose hopes had been raised by reports that the Germany might be inching toward the compromise mutualisation plan. The plan, from Germany's so-called "wise men" group of private economic experts, would let countries with debt above 60% of GDP such as Greece issue eurobonds for debt above that level, which would then be paid down over a maximum of 25 years.

Earlier, Chancellor Angela Merkel said world leaders should not "overestimate" Germany's ability to resolve the eurozone debt crisis. Mrs Merkel called for more regulatory powers for the European Central Bank, and repeated that growth should not be financed by more debt.  Referring to the G20 meeting, she said: "I say to them Germany is strong, Germany is an engine of economic growth and a stability anchor in Europe... but Germany's powers are not unlimited." Europe would only find a way out of the crisis with a strong "political union" that mandated greater fiscal co-ordination and oversight to put member countries on a "solid foundation", she said. Mrs Merkel has resisted calls that austerity measures in the eurozone should be relaxed in the hope that it would boost growth. "We must all resist the temptation to finance growth again through new debt," she said. She also called for the European Central Bank to play a "bigger role" in overseeing banks to avert further turmoil in the industry.

Source URL: http://www.bbc.co.uk/news/business-18438402
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